Running a company can be a risky business, and making sure it’s secure against future issues is essential. From vehicle coverage to professional liability insurance, getting the right policies will help keep your company in the black if the worst should occur. While not every business needs all kinds of insurance, here’s a breakdown of the most common types of coverage that most companies should have to give investors peace of mind.
Professional Liability Insurance (PLI)
Most people understand that general liability coverage protects small businesses from claims made by individuals. Having insurance against bodily injury, property damage, and reputation issues is helpful, but it doesn’t handle every claim that can be brought against experts in their field. Choosing professional liability insurance will help accountants, physicians, therapists, and lawyers protect themselves from malpractice, negligence, and even misrepresentation claims. Without PLI, professionals are at risk even from the most minor of mistakes.
Workers Compensation
If a business has any employees, worker’s compensation insurance is always a good idea. Accidents happen, and when something occurs during working hours, there’s a good chance your company will be liable. These policies cover medical treatment, disability, and death benefits for tragedies that happen at the workplace. Even if employees perform non-intensive labor or services, compensation insurance could still keep an unlikely event from draining bank accounts.
Home-Based Business Insurance
Some people running their business out of their home office believe their homeowner’s insurance will cover any company incidents. However, many plans don’t include your domicile desk as part of the household. In addition, if you put in a business-oriented claim, there’s even a chance that your homeowner’s insurance won’t cover the damages. There are many limitations to homeowners insurance, including:
- Standard plans only cover approximately $2,500 of your business property. If important and costly equipment is destroyed during a fire, your policy probably won’t cover the entire replacement costs.
- “Other structures” including detached garages converted for business use aren’t usually covered by a homeowner’s insurance plan.
- Home insurance generally won’t cover business damages that happen away from home, such as a dropped laptop or company phone.
The best way to make sure your assets are covered, look into home-based business insurance. If your household agency doesn’t have add-ons for businesses, you may need to find a different insurance source to protect your company.
Property Insurance
Like homeowner’s insurance, businesses get property insurance to keep building assets secure. “Property” includes the building itself, inventory, office furniture and equipment, and signage. While these policies tend to cover the basics including fire, theft, and storm, they usually do not include the more major and destructive events such as floods and earthquakes. If these types of events aren’t covered, check with the agent who supplies your workers’ compensation or professional liability insurance for additional policy options.
Vehicle Insurance
If you have a car, truck, or some other form of transport associated with your business, vehicle insurance is a no-brainer. Having your employees, equipment, and other people protected while your vehicle is on the road will ensure you don’t pay out-of-pocket when an accident occurs. Most companies should invest in third-party injury policies, and comprehensive insurance will even cover employees using their own vehicles.
Business Interruption Insurance
If the pandemic has taught business owners anything, it’s to be prepared for a halt in service. Restaurants and retail chains suffered most during Covid-19 and those without the proper insurance policies felt the pain even more. Some reasons to choose business interruption insurance (BII) include:
- Moving to a new location
- Civil authority shutdowns
- Replace lost income from natural disasters
- Pandemic shutdowns
- Replace commissions and training costs
- Maintain loan payments
While internet-based companies and individuals using professional liability insurance may not need to worry about their doors closing, those businesses with actual storefronts would do well opting for BII just in case they need to shut down for a while.
Product Liability
Like professional liability insurance covers the services performed by professionals, product liability coverage handles mistakes that occur in the manufacturing process, If an injury were to occur due to faulty construction, design flaws, poor directions, or natural defects, this type of insurance will protect your business from those claims. Even food from a restaurant may be considered under product liability if it makes someone sick. Remember that most of these policies don’t cover the cost of recalls if defects occur on a massive scale.
Ensuring with Insurance
A lot can go wrong with a business, and investors put their money on the line to help make it succeed. Without insurance, a single bad day can sink a company and leave employees and investors out in the cold. Property, home-based business, and professional liability insurance are all great ways that companies can mitigate the damage done by the unforeseen. With the right policies, your company can bounce back from even the worst disaster even stronger than before!
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.